Global Trend Report from EI Paris: the top 5 insights we’re seeing in luxury right nowback to all NEWS

Last October, Interbrand released its Best
Global Brands 2018 ranking, unveiling that luxury brands were
growing at a faster rate than all other sectors. Thanks to higher anticipation
and responsiveness to shifting cultural trends, luxury brands “have managed to
immerse themselves into street culture and provide levels of access that, while
retaining their authenticity and a level of exclusivity, have made their brands
more desirable to more customers.”

And we couldn’t agree more.

As the global research agency for luxury companies
ranging from leather goods to high horology and jewelry to champagne and
spirits, we know firsthand that luxury brands are on the forefront of societal
change. Within the context of shifting cultural trends and growing consumer
expectations, we at EI are uniquely positioned to help luxury brands understand
the context they are operating in, identify and qualify their audiences (are
they advocates or detractors? What are the latest socio-demographic shifts
within segments?), tailor and optimize content, and ultimately measure the
impact of brandactions.

To share some of our intel, we’ve compiled the top
5 insights shaping the luxury industry today:

1. Luxury consumers are seeking meaningful
purchases. And the best luxury companies are responding.

As luxury brands gain more visibility on the
international stage, their consumers are increasingly seeking more meaningful
purchases, therefore raising the stakes for luxury companies in today’s
operating environment. In fact, several studies show that Millennials, and even
more, Gen Z’ers, expect brands to have
an authentic and meaningful strategy that reflects a brand’s value,
and 49% seek
out brands that align with causes. Already, several luxury brands
are taking a stand on societal issues that reinforce their values, purpose, and
contribution to society at large. For example, Kering’s, the international
luxury group behind brands such as Gucci, Yves Saint Laurent, and Balenciaga, partnered
with Michelle Obama during the French edition of her “Becoming” book
tour, aligning itself with a specific standpoint in the midst of a “hot” and
even political discussion. In Kering’s case, the partnership was based purely
on association with a figure of women’s empowerment and gender equality in a
post-Weinstein era. Another example of brands taking a stand is Stella
McCartney’s recent sustainable engagement and the launch of a Sustainable
Fashion Charter to fight climate change. While being an
environmental issue, the campaign clearly signaled to consumers what Stella
McCartney stands for, beyond just material goods.

2. The luxury—get this—wellness economy, is booming.

The activewear
market is growing faster than any other category in fashion, and
luxury brands are no strangers to this trend. In fact, the majority of luxury
companies embraced the movement with, for example, Louis Vuitton’s famous Louis
Vuitton x Supreme collaboration or Balenciaga’s sneakers.
While streetwear and sportswear used to be part of “popular” culture,
athleisure (athletic x leisure) fashion has become a lifestyle trend notably
supported by celebrities who desire to make it a fashion statement worthy of an
Instagram moment. Associated with the increasing visibility of luxury brands’
men collections — led notably by Virgil Abloh at Louis Vuitton – the
athleisure trend is exponentially growing to become a true art of luxury living.

3. Racial controversies won’t be
tolerated—or forgotten—anymore.

Several social media-driven scandals erupted in the
luxury world strongly damaging brands’ reputations, putting the issues of race
and exclusivity front and center in the industry. Last November, Dolce
& Gabbana published promotional videos for their Shanghai show,
quickly creating controversy. On social media, activists called the campaign
“offensive” and “stereotypical” and were quickly joined in conversation by
larger audiences, eventually forcing D&G to cancel their event. The
controversy gained an unprecedented international visibility, paving the way for
a new era of scrutiny towards other brands and campaigns that have come under
fire for similar issues.

4. Luxury brands are strategically focused
east, to the Middle East to be precise.

Last year, Deloitte reported that “the Middle East has one of the largest young populations in the world and Millennials in the Middle East are richer than the average and their willingness to buy is stronger. Addressing the new Arab luxury audience represents an opportunity to create brand loyalty, fuel luxury spending, and foster market growth.” Already, several studies highlighted the UAE’s leading position as the “largest luxury market in the MEA” notably boosted by the luxury tourism industry. With its first-ever watch auction in Dubai, the international auction house Sotheby’s showed that the Middle East can indeed be the new hit market for luxury brands. The creation of a one-of-a-kind UAE timepiece by the Swiss maison Jaquet Droz, presented at The Dubai Mall on January, further underscored local opportunities for luxury brands and their need to adapt products to local buyers.

5. Luxury brands: less about products,
more about the story behind them.

Storytelling has always been an important part of a
luxury brand’s communication, but with consumers increasingly more informed and
seeking more than just a product, companies have to find new ways to angle
their communication and incorporate products at the center of their history.
Take Cartier for
example. Cartier used a great mix of
technology and virtual reality story-telling to bring visitors of their Shanghai
exhibition to 1901 Paris to tell the story of how their first wristwatch came
to be through an immersive experience. Likewise, the recent #10YearChallenge
has been utilized by luxury brands such as Bally to “tell consumers that what
they loved about their brand 10 years ago is exactly the same today,” thus
enhancing the history and values of the brand through a timeliness product.

To conclude, and as uncovered in our 2018 Edelman Earned Brand study, today more than ever, consumers are putting their faith in brands to stand for something. Whether it is through the search of meaningful purchases, the need to connect with brands through a story, or the controversies stemming from brands’ misinterpretation of culture, luxury consumers’ behavior and expectations are radically shifting, and the luxury brands that win tomorrow will be the ones who capitalize on these trends today.